U.S., Russia Reaffirm Cooperation on Energy-Efficiency and Smart Grid

May 27, 2011

The United States Agency for International Development (USAID), working with the U.S. Department of Energy (DOE) to cooperate with Russia on energy-efficiency efforts and smart grids, is supporting efforts to share experience and best practices among U.S. and Russian municipalities and utilities. This month, representatives from both countries signed a memorandum of understanding in San Diego and Belgorod, Russia, building on an earlier exchange involving utilities and regulators in Texas and federal and utility officials in Kaluga, Russia.

USAID's deputy assistant administrator for Europe and Eurasia, Jonathan Hale, explained: "This new U.S.-Russia cooperation will enable utilities to reduce harmful emissions, including greenhouse gases, by enhancing their ability to help consumers use energy more efficiently; integrate and deliver renewable energy; and more efficiently transmit and deliver electricity to consumers. It is a win-win effort for the U.S., Russia, and the global environment and climate."At the G8 Summit in Deauville, France, presidents Barack Obama and Dmitry Medvedev highlighted the mutual interest of their countries in energy efficiency and sustainable energy development and the progress that has been made since their announcement of this initiative at the Summit on June 24, 2010. Under the Energy Working Group of the Presidential Bi-national Commission, USAID in cooperation with DOE and the U.S. Energy Association, (USEA) have developed and begun implementation of a smart grid partnership program.

A visit by Russian industry, technical and government officials to Texas and Washington, D.C., in December 2010 provided an opportunity to see first-hand the activities of CenterPoint Energy and Austin Energy utilities in this field and their interactions with consumers, vendors, and regulators. A seminar in Washington provided an overview of U.S. policy, programs and technologies that are being supported by the DOE and the private sector. A work-plan for a two-year effort was developed that included utility partnership exchanges, business roundtables, and a joint assessment of regulatory and other barriers to the introduction of smart grid technologies and systems. A return visit by CenterPoint Energy and Austin officials to Russia in the spring of this year exposed these U.S. utilities and technology companies to the challenges that Russian utilities face in modernizing their systems and moving to smart-grid applications.

These discussions produced ideas for possible pilot projects that are currently under review. Will Polen, USEA Program Manager, stated that this exchange of "industry experience and knowledge" broadens the perspectives of the participants and can help spur new ideas and innovations in tackling these 21st century problems.

Austin Energy explains its interest in participating in the partnership to help advance its mission to deliver clean, affordable, reliable energy and excellent customer service. According to Jeff Vice, director of local government relations, "as the electric system adapts we are trying to figure out what the business model is going to be. Power is not going to be pushed centrally and one way through the grid. It's a much more fluid environment, homes are going to be built much more efficiently, and consumers are better educated. We use a variety of mechanisms to get to the goal. It's not just about adopting one of the pieces of smart grid, it's about creating new policies – for example, every new home will have to be net zero by 2030 or introducing rebate programs for our customers," Vice said.

By partnering with local universities or participating in the bilateral exchange with Russia, Austin Energy is designing what they call the "energy system of the future." According to Vice, "one thing we liked discussing was the pilot projects Russia was doing – start small, test and learn." These ideas through the exchange help boost innovation. USAID is working with DOE in fostering additional partnerships, including a municipal partnership between the cities of San Diego and Belgorod. A delegation from Belgorod visited San Diego and Silicon Valley technologies in April and a return visit is planned for June 2011 within the framework of a memorandum of understanding concluded prior to the summit. From these initial exchanges, it is clear that U.S. companies are very interested in exploring opportunities in Russia as this large system further modernizes its transmission and distribution infrastructure.

USAID and DOE will be working to further these business and commercial ties over the coming year. Two specific activities are envisioned in addition to the utility and municipal partnerships. A business roundtable is planned for the fall in Russia and a joint study on regulatory issues and barriers in smart grid deployment is in the works.